Understanding the Home Foreclosure Process

By Joan Whetzel

All States have laws governing the foreclosure process. Banking institutions design their foreclosure procedures to work within State laws. In Texas, foreclosures take about 60 days,beginning with the notification from the bank, through the foreclosure sale and the final eviction.

Foreclosure in Texas

In Texas, the foreclosure process begins as soon as the homeowner defaults on their mortgage, when payments are at least 30 days late. The lender notifies homeowners that are late and have 20 days to make the loan current. If the homeowner fails to bring the loan current, a “notice of acceleration” is delivered, informing the homeowner that the foreclosure process has been started.

The Foreclosure Sale

Texas foreclosure sales occur on the first s of the month after the 21-day acceleration period has passed, with a minimum bid that the bank will accept. If the amount owed exceeds the purchase price, the loan-holder owes the remaining balance. If the original homeowner is still living in the house, the new owner has the right to begin the eviction process.

Eviction After the Foreclosure

The new homeowner contacts the county constable’s office (in the county where the home is located) to serve an eviction notice. The eviction notice includes a court date for the eviction hearing. Once the judge rules on the eviction, the former owners have 5 days to move or file an appeal. If they do not move or appeal, the constable’s office posts a notice on the door giving them 24 hours to leave. If they still refuse to leave, the constable's office can physically remove the occupants and their belongings.

The Real Cost of Foreclosure

Foreclosures are going to cost you, in more ways than one. What are those costs?

You will lose your home. It can take anywhere from weeks to months, depending on the State you live in, but the house will be taken by the bank and you will be evicted.

You could have a judgment placed against you by the lender. This judgment amount will include the costs of the court action for the foreclosure process plus the amount you still owe on the loan after the house is sold. If you owed $100,000 on your mortgage, and the lender managed to sell it for $75,000, the amount remaining on your mortgage is $25,000, and the lender will expect you to pay that back.

Foreclosures will severely damage your credit for up to 10 years. This will make it difficult to impossible to get a loan of any kind, to buy a new home, to get a credit card, to buy a car, and maybe even to rent a home or apartment.

Inivestigate ways to avoid foreclosure. If there is any way you can stop the foreclosure, then do it. Otherwise, repercussions will follow you for many years to come.